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No Deductible: Is It the Best Auto Insurance?

written by: Stephanie Mojica•edited by: Laurie Patsalides•updated: 2/10/2009

The idea of paying no deductible if involved in a car accident may seem like an auto insurance dream. However, there are many caveats to zero deductible car insurance, not to mention the fact that many people may not even qualify for such a plan.

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    When a consumer has a car accident and is insured, he or she must pay a deductible regardless of who is at fault for the accident. A deductible is a payment that must be made by the driver to the insurance company before benefits take effect. Some car insurance plans have as much as $1,000 that must be paid upfront to get any use from being insured. This can be a challenge to some people, especially students and the elderly.

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    Having No Deductible

    No deductible auto insurance, where the insured pays nothing upfront in the event of an accident, is especially popular in Canada and Europe. There are some states in the United States that permit consumers to enjoy zero deductible car insurance, but there are many drawbacks. First, most companies do not offer these type of plans. They are extremely risky to the business and also increase costs of the consumer's own insurance policy. Those who do sell no deductible auto insurance have difficult requirements for customers to meet, usually entailing a nearly perfect driving and credit record.

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    Better Options

    A better option more universally available to drivers is to get a low deductible car insurance plan. This is the best auto insurance one can find, because many more people qualify for deductibles of $100 to $500. It is easier to come up with $500 or less in a pinch than $1,000. In addition, the policy will cost far less than a zero deductible plan, and there will be more competitive insurance quotes available from multiple companies.

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    Remember that most car thefts and vandalism incidents usually do not incur a deductible on many plans, or you could get a low or no deductible plan for these types of events. The best way to go about getting a good insurance policy that protects you financially in both the short term and the long run is to contact a qualified insurance broker in your community, or seek a quote online.

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